Tuesday, May 24, 2011

The approval by the Victorian EPA on Friday of a new coal power station is set to create yet another headache for Julia Gillard. In the leadup to the election, she promised that "We will never allow a highly inefficent and dirty power station to be built again in Australia”.

With a projected emissions intensity of 0.8tonnes of CO2/MWh (almost double the OECD average), the HRL power station in the Latrobe Valley is clearly a highly inefficient and dirty power station. So presumably, either there will be some kind of federal intervention to block it, or Gillard will break an election promise.

But even if the political system fails, as it so commonly does, the plant may not go ahead for purely financial reasons. The front page of Saturday’s The Age ran the headline “Big banks ‘no’ to coal plant”, revealing that all four of the major banks have stated that they are not involved in the project. This means that HRL is likely to struggle to arrange finance, even with $150million in direct government handouts.

The fact that none of the big four banks is involved in HRL is no doubt partly a reflection of the individual project, which is highly speculative and financially marginal, but also reflects the wider sentiment that coal is slowly but surely having it’s social license withdrawn. While none of the big four banks have categorically ruled out financing new coal power stations, they know that they face significant reputation risks from being associated with the coal sector.

So, while HRL has received at least partial approval, there is still a long road to travel before they can obtain finance and start construction. Even then, it is likely that the plant would be the focus of a sustained campaign of direct action to physically stop it from being built.

As usual, regulators are running to catch up to community expectations.

Wednesday, May 11, 2011

In the long run, the least likely event will occur. Such is the nature of probability, and the nature of risk.

The environmental movement have been talking about this for some time now. It has been the basis of much of the opposition to nuclear energy and releasing genetically engineered organisms into the environment for the last several decades.

The standard formulation of ‘risk’ is that it is a function of the probability of an event occurring and the magnitude of the hazard. From the viewpoint of technological optimism and managerialism, the seductiveness of a very low probability often leads people to discount the magnitude of the hazard. This distortion is amplified even further by the fact that the profits of success remain privatised, wheras the responsibility for large-scale hazards is often socialised, with Governments and taxpayers picking up the tab.

Insurance companies are reluctant to underwrite nuclear power stations for the simple reason that, although the probability of catastrophe may be low, the potential magnitude and cost of a meltdown is staggeringly large. The only reason that nuclear power stations have been able to be built is because Governments have provided insurance and have limited the financial liability of operators.

A similar dynamic is at play regarding carbon capture and storage. Private companies will no doubt be willing to profit from storing CO2 underground, but nobody would be seriously willing to invest in it unless they are exempt from liability in the case that things go seriously pear-shaped . That is why the federal Government passed legislation that exempts companies from long term responsibility for storage of CO2 and places it instead in the lap of taxpayers.

Coming back to Fukushima, Japanese taxpayers will undoubtedly pick up a significant portion of the cost of managing the crisis, which is expected to require serious and ongoing management for many decades. If TEPCO were to be held fully responsible for the entire long term costs of the disaster, they would probably go insolvent. In a capitalist system, this ought to happen, otherwise we perpetuate the endemic problem of short-term and sociopathic behaviour on the part of corporations who operate in the knowledge that they’ll never really be held accountable for the negative consequences of their operations.

But it is not only responsibility for the financial costs that need to be considered. What about responsibility for the actual physical work and the related personal risks?

I’ve read various news reports about TEPCO’s difficulty in recruiting workers to help manage the crisis. Most of their staff have reached or exceeded the allowable radiation exposure limits so the the company is having to find new recruits. Some of these people obviously are technical experts, while others are labourers needed to spray cooling water and perform other physical operations.

At Chernobyl, hundreds of peasant workers trooped in to the reactor with little or no knowledge of the danger they were being exposed to. Fortunately, this can’t happen in Japan. Instead, TEPCO will have to pay enough danger money to enable them to recruit a steady stream of workers who are willing to take the risk of subjecting themselves to radiation in the hope that the money is worth it.

It seems to me that it is these workers who are actually the ones who are really taking the responsibility for Fukushima. They are the ones who will live with the consequences. And I think it is useful to ask, who SHOULD be doing this dangerous work? Who should be taking direct, personal and physical responsibility for the crisis?

Surely the people who have benefitted from the previous profitability of Fukushima, the people who own it and built it, should now be responsible for managing the downside? This means the Directors and shareholders. But what would that look like in practice?

How is this for a thought experiment…what if there was a kind of conscription, where the names of directors and shareholders were put into a hat, to be randomly selected for frontline roles helping to cool the reactor? What about staff at the banks that financed the plant? Should they be in the conscription pool as well? Or people like Andrew Bolt, Ziggy Switkowski and the other strong advocates of nuclear power?

Or should it just be left to working class Japanese people who have no connection with the plant but who happen to need the money?

Fukushima should not only cause us to reconsider the risk of nuclear power, it should also cause us to reflect on the nature of corporate responsibility – or irresponsibility as the case may be.

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Like you Ilove love, life, the sweet smellof things, the sky-bluelandscape of January days.And my blood boils upand I laugh through eyesthat have known the buds of tears.I believe the world is beautifuland that poetry, like bread, is for everyone.And that my veins don't end in mebut in the unanimous bloodof those who struggle for life,love,little things,landscape and bread,the poetry of everyone.